The financial impact of data breaches
Data breach! Two words no business owner wants to hear. A data breach means a malicious third party or form of malware has bypassed your network security. The damage caused by said intrusion varies, but it’s never a good thing. Problems such as downtime are likely to occur, and in those periods, it costs a business.
2019 was another harrowing year when it came to the dollars and cents. According to IBM, the average cost of a data breach in the United States alone neared 4 million USD, an increase of 6.4 percent from 2018. Bad news, that means malicious attacks are growing in prevalence and costing industries more each year.
That’s not a pleasant reality to consider, but it’s a problem industries are faced with.
The Long Term Costs
One might think the cost of data breaches stops at the numbers alone, but in fact, there are other unfortunate factors playing a role which do real harm to a business.
Among them is reputation and brand strength. Today, a company’s identity is everything to its consumer base. In the digital era, customers need to trust a business they work with, and constant data breaches means their information is constantly under threat. In the case of a breach, losing customer data such as credit cards, email, and even a personal home address can be devastating. Who wants to do business with an enterprise that can’t keep info safe?
Worse, the costs go beyond the impact of the initial financial damage caused by downtime and lost data. Costs prevailing after the fact are called longtail costs, and can affect an enterprise’s bottom line for several years. Again, a lot of this comes from lost business due to the havoc caused to reputation. While larger businesses can survive the blow despite losing client info (looking at you, Yahoo), small to medium sized companies can’t weather the storm.
What kind of financial damage? According to IBM, SMBs with less than 500 employed staff suffer an average of 2 to 2.5 million in their first year, and that’s nothing to say of the years following. The US claims the largest in cybersecurity loss, averaging around $7 million a year. The worst part – these costs are only expected to rise as the threat of malicious intrusion advances.
What You Can Do
Solving the cybersecurity crisis is no easy task, and it’s better to expect a type of third-party attack than assume your business is safe. It doesn’t matter the size, if there’s value to be had in stealing data, you can be sure malicious parties are after it.
Creating an advanced network of protection is the best option. Layered networks with automated cybersecurity plans are just a few ways to shield your business, along with extensive backup options through cloud/data services.
You can even look into managed providers, who boast all the benefits of expert IT staff and security protection at a fraction of the cost. If you’d like to learn more about MSP services, contact us at Bytagig.